The Big Ole Thread 'o Government Intervention into Free Markets

#1
volinbham

volinbham

VN GURU
Joined
Oct 21, 2004
Messages
67,719
Likes
55,281
#1
Split from the drug thread and inspired by the IP protection discussion.

Presumably even our most ardent free marketers do not advocate full caveat emptor and laissez faire systems.

So, what functions of government are "okay" with free markets and <gasp> might even improve their efficiency?

NOTE: this is more about having them or not rather than do the current ones work correctly (we know they don't in most cases)

1) What is the role of government action in this realm? (fairness, protection against exploitation, etc.)

2) Anti-trust laws - should we have them?

3) IP laws - should we have them?

4) Price discrimination laws - should we have them (they are limited to "anti-competitive" actions currently)

5) Financial transparency laws - should we have them

6) FDA and other consumer safety laws - should we have them

7) EPA regulations - should we have them.

8) What am I missing - should we have them?

Overall, does the existence of some government imposed rules on markets actually make them function more efficiently?

I'll hang up and listen (until you say something dumb then I'll trash it)
 
#4
#4
Good thread idea. Need some form of all of the above, though the extent of intervention from each of them undoubtedly go too far.
 
#5
#5
volinbham said:
Split from the drug thread and inspired by the IP protection discussion.

Presumably even our most ardent free marketers do not advocate full caveat emptor and laissez faire systems.

So, what functions of government are "okay" with free markets and <gasp> might even improve their efficiency?

NOTE: this is more about having them or not rather than do the current ones work correctly (we know they don't in most cases)

1) What is the role of government action in this realm? (fairness, protection against exploitation, etc.)

2) Anti-trust laws - should we have them?

3) IP laws - should we have them?

4) Price discrimination laws - should we have them (they are limited to "anti-competitive" actions currently)

5) Financial transparency laws - should we have them

6) FDA and other consumer safety laws - should we have them

7) EPA regulations - should we have them.

8) What am I missing - should we have them?

Overall, does the existence of some government imposed rules on markets actually make them function more efficiently?

I'll hang up and listen (until you say something dumb then I'll trash it)
Click to expand...

Depends on your views of positive and negative liberties. Many free market advocates, in the vein of Smith, argue that caveat emptor and laissez faire reduce the freedoms and liberties of parties to exchange.

Further, for most free market advocates, rights, not utility and efficiency, are the focus.
 
#6
#6
Wouldn't any impediment result in better effciency as long as the business survives? Obstacles, hurdles and challenges force business to trim fat, be creative, take risks when they might not do those things in times of ease. Doesn't matter if it is in the form of regulation, inadequate resources, or labor challenges, does it? The issue (for me) is that Government overstep of Constitutional constraints are at fault for some of the regulations.
 
#7
#7
I think certain levels have to be accepted. FDA being a key one, and others that "look out for" the general population's well being. But otherwise, and this is part of the reasoning for why I believe we need the FDA, is the lack of transparency on the part of the companies. if there was some way to get that without the government I would be all for it.
 
#8
#8
also in general I believe the various building regulations and material standards are things we have to have that under a true free market may not have. again, end user safety.
 
#9
#9
therealUT said:
Depends on your views of positive and negative liberties. Many free market advocates, in the vein of Smith, argue that caveat emptor and laissez faire reduce the freedoms and liberties of parties to exchange.

Further, for most free market advocates, rights, not utility and efficiency, are the focus.
Click to expand...

Part of the reason I chose the word efficient instead of free though I would agree more with the Smith camp
 
#10
#10
volinbham said:
Part of the reason I chose the word efficient instead of free though I would agree more with the Smith camp
Click to expand...

Right, but in theory we can have efficient economies that are nationalized.

I think looking at efficiency and utility are things one does after securing and protecting rights to life, liberty, and property.

This is the approach of Smith, Ricardo, Mises, Hayek, and Friedman. Coincidentally, they argue that once these rights are secure, almost nothing else needs to happen to ensure efficiency.

I think many confuse their talk of efficiency and utility as if they are using that to justify the free market. They are not.

The persons who require extra protection in order to be considered as free parties to exchange are the consumers, not the producers and sellers. The producers and sellers are going to be aware of what the product/service they provide consists of; consumers are liable to be defrauded, exploited, etc in the market. These are all things that are inconsistent with free agency, thus inconsistent with free markets.

It's tough to pull a lot of the government regulations out of these conditions.
 
#11
#11
therealUT said:
Right, but in theory we can have efficient economies that are nationalized.

I think looking at efficiency and utility are things one does after securing and protecting rights to life, liberty, and property.

This is the approach of Smith, Ricardo, Mises, Hayek, and Friedman. Coincidentally, they argue that once these rights are secure, almost nothing else needs to happen to ensure efficiency.

I think many confuse their talk of efficiency and utility as if they are using that to justify the free market. They are not.

The persons who require extra protection in order to be considered as free parties to exchange are the consumers, not the producers and sellers. The producers and sellers are going to be aware of what the product/service they provide consists of; consumers are liable to be defrauded, exploited, etc in the market. These are all things that are inconsistent with free agency, thus inconsistent with free markets.

It's tough to pull a lot of the government regulations out of these conditions.
Click to expand...

I see what you are saying and agree with the second to last paragraph. My OP and follow was not intended to counter these points.
 
#12
#12
One of the arguments for free (freer) markets is that they naturally adjust and market forces will right the cases of exploitation "in time".

What is the right time frame for allowing markets to correct themselves?

Do we need anti-trust laws or will competitive forces and creative destruction via innovation take care of the problem?

Same for price collusion laws - presumably if a group of suppliers is colluding to keep prices high, new competitors will be incentivized to enter the market at lower (though still profitable) rates.
 
#13
#13
the problem is what happens when there isn't enough of a market to allow a "free market". the free market works fine in large systems, isolated towns can easily be "taken" over by single instances moving in. Think walmart. To me in this case the free market has allowed and encouraged a monopoly. Not saying our current system doesn't
 
#14
#14
LouderVol said:
the problem is what happens when there isn't enough of a market to allow a "free market". the free market works fine in large systems, isolated towns can easily be "taken" over by single instances moving in. Think walmart. To me in this case the free market has allowed and encouraged a monopoly. Not saying our current system doesn't
Click to expand...

So is freedom in this case the freedom to choose from multiple suppliers? It might be argued that Walmart brings more choice in # of products than the collective of businesses that left as a result. Variety of product may increase while variety of suppliers decreases.

Further, a reduction in total spending for those products Walmart "forced" out could allow freedom to buy products that consumers otherwise could not have afforded.

What exactly is freedom in this situation?
 
#16
#16
volinbham said:
Split from the drug thread and inspired by the IP protection discussion.

Presumably even our most ardent free marketers do not advocate full caveat emptor and laissez faire systems.

So, what functions of government are "okay" with free markets and <gasp> might even improve their efficiency?
Click to expand...

lulz

Of course there has to be some ways in which government creates better outcomes. When you intervene in a million different ways you are bound to do something right.

When you start intervening you have to take the bad in with the good. My argument is that it does more harm than good. What do you think? You think government intervention results in more good than harm?
 
#17
#17
For example, there is conceivably a top-down IP system that would create better outcomes than the free market would. I have no faith in government's ability to create that outcome. How in the **** do they measure the success of their intervention? They just keep guessing and we hope they are making the right decisions.
 
#18
#18
n_huffhines said:
lulz

Of course there has to be some ways in which government creates better outcomes. When you intervene in a million different ways you are bound to do something right.

When you start intervening you have to take the bad in with the good. My argument is that it does more harm than good. What do you think? You think government intervention results in more good than harm?
Click to expand...

not bham, obviously, but in what way? what good vs harm? Dollar amount? Innovation? This ubiquitous "freedom"?
 
#19
#19
LouderVol said:
not bham, obviously, but in what way? what good vs harm? Dollar amount? Innovation? This ubiquitous "freedom"?
Click to expand...

I am talking about social welfare (not to be confused with welfare benefits). Bham gave us the context of market inefficiency. Market inefficiency is when we don't maximize total social welfare.

In a lot of cases the market cannot maximize TSW, so government intervenes and we all pray to God that they somehow increase TSW.
 
#20
#20
n_huffhines said:
lulz

Of course there has to be some ways in which government creates better outcomes. When you intervene in a million different ways you are bound to do something right.

When you start intervening you have to take the bad in with the good. My argument is that it does more harm than good. What do you think? You think government intervention results in more good than harm?
Click to expand...

Sounds like you believe zero government intervention would maximize good then?
 
#22
#22
n_huffhines said:
I am talking about social welfare (not to be confused with welfare benefits). Bham gave us the context of market inefficiency. Market inefficiency is when we don't maximize total social welfare.

In a lot of cases the market cannot maximize TSW, so government intervenes and we all pray to God that they somehow increase TSW.
Click to expand...

i would say believing that any system will actually "maximize" tsw is foolhardy, its a theoretical goal which is relative in any context. and impossible to prove one way or another that one system maximizes more than any other. in theory one system might work better but in the open world market somehow proving one system is better is impossible. Country X using System 1 might make more money than Country Y Using System 2 but it might only make more while Y is using 2. what once was a good system might no longer hold true upon varying circumstances the world throws around on a daily basis.
 
#23
#23
n_huffhines said:
I don't know what you mean by "maximize good". I think it would lead to more total social welfare.

Can you answer my question?
Click to expand...

You are the one who used the word good vs harm. I don't know what that word means to you so I can't answer if I think it does more good than harm.

I do think that there are market failures and I won't rewrite TrUTs comments but I agree that if want the consuming party to have freedom in actions then some regulatory framework helps in making the exchange freer.

So if that's more good than harm I'd say yes some level of government regulation is does more good than harm. That is a different question than how much government regulation is the right amount to maximize the good.
 
#24
#24
LouderVol said:
i would say believing that any system will actually "maximize" tsw is foolhardy, its a theoretical goal which is relative in any context. and impossible to prove one way or another that one system maximizes more than any other. in theory one system might work better but in the open world market somehow proving one system is better is impossible. Country X using System 1 might make more money than Country Y Using System 2 but it might only make more while Y is using 2. what once was a good system might no longer hold true upon varying circumstances the world throws around on a daily basis.
Click to expand...

Yeah, that's why we are talking about what "believe".
 
New posts
You must log in or register to reply here.

VN Store



Back
Top